How many of us have clicked the “I Agree” button just to use programs like Microsoft Word? How many of us have opened up shrink-wrapped things which say something to the effect of “By opening this package, you are agreeing to the terms and conditions found inside?” I am sure most, if not all, have done at least one of the above without reading the actual terms and conditions.
Professor Lydia Pallas Loren at the Lewis and Clark Law School has a paper (Ohio Northern University Law Review, Vol. 30, 2004), which proposes a rebuttable presumption of copyright misuse when copyright owners seek to avoid express statutory limitations by contract. An abstract of this paper of is also available. Copyright misuse is an equitable defense that is raised by an accused infringer. An example of avoiding statutory limitations by contract could be a clause that restricts a person’s fair use of a copyrighted work, like in research or teaching. Fair use of a copyrighted work is allowed in Section 107 of the Copyright Act.
As enumerated in Section 106 of the Copyright Act, the owner of a copyright has the exclusive right to do certain things, subject to sixteen provisions (Sections 107-122). Professor Loren’s proposed rebuttable presumption of copyright misuse would arise whenever a contract (like those formed by clicking a button or opening the shrink wrap) does not allow a person to do what is allowed under Sections 107-122. To rebut this presumption of misuse, “the copyright owner should be required to prove that enforcing the contract at issue would not likely lead to a significant reduction of the external benefits the Copyright Act is designed to ensure through the limitation the copyright owner is seeking to avoid.” Professor Loren gives the following example:
A copyright owner might negotiate the sale of a unique piece of artwork and include in the contract for sale a clause that prohibited the resale of the artwork by the purchaser. Resale of a lawfully made copy of a copyright work is expressly permitted by Section 109 of the Act. If a third party then publishes a picture of the artwork, the copyright owner could sue for infringement and the defendant could assert a misuse defense. The burden would be on the copyright owner to rebut the presumption of misuse triggered by the clause that seeks to avoid the limitations of the first sale doctrine, codified in section 109 of the copyright Act. Major external benefits of the first sale doctrine include the wider distribution of copies of works allowing the greater numbers of individuals to learn from or experience a particular work and a prohibition on resale price maintenance by copyright owners. Explaining a plausible and credible justification for the insertion of the clause prohibiting resale into the particular sales agreement at issue cold assist the court in evaluating the level of interference with the external benefits the limitation seeks to ensure. For example, the copyright owner’s ability to exercise his rights as the copyright owner of the work, or perhaps the copyright owner desired to know who to approach first in the case of any infringement as the purchaser would be the only person who could have permitted access to the copy that facilitated infringement.
Given the unpredictable rate at which technology and the world is changing, such a rebuttable presumption may not be a good idea. Who knows what other technology will be available in the future?
A proposal that I think is more adaptable to the exponential growth and development of technologies can be found in a forthcoming paper by Professor Margaret Jane Radin at the Stanford University School of Law. An abstract of that paper is also available. Professor Radin proposes a framework that would allow certain sections of the Copyright Act to be varied through contract.
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